1933 redux
Here’s what I said before I knew the outcome of the election:
6. Are we facing a bad interregnum, as during 1932-33? Perhaps, especially if Trump becomes bitter and blames the American people, much as Hitler blamed the Germans for letting him down. (Oops, I’m not allowed to compare Trump to Hitler.) Perhaps the only constitutional amendment with a prayer of passing is to have presidents take office in early January with the new Congress, or better yet right after the Electoral College votes in mid-December. It’s hard to see how either party would object, at least if the interregnum ends up being a mess.
And here’s the FT:
Just before boarding his Marine One helicopter to depart the White House on Wednesday, Mr Trump vetoed a $740bn bill that funds everything from weapons to military pay. The veto came less than 24 hours after he rejected a stimulus relief bill that his team had helped craft with Democrats and Republicans.
On top of throwing a spanner into the legislative works on Capitol Hill, Mr Trump on Wednesday issued a series of controversial pardons, including to Paul Manafort, his former campaign manager. That followed another set of pardons on Tuesday, including to four men who killed unarmed Iraqi civilians when they worked for Blackwater, a security company founded by Erik Prince whose sister Betsy DeVos is Mr Trump’s education secretary. . . .
Some critics have accused Mr Trump of trying to spark turmoil to spite his opponents, while others have suggested that the president is throwing a long temper tantrum because of his failure to win re-election.
“Every day it feels like it gets worse. It is not just incompetence, it feels like malice,” said Mieke Eoyang, a former top Democratic congressional aide. “There’s no American analogue in terms of the scope of what he’s doing . . . I’ve never seen this level of malevolence in American government.”
Some critics portrayed Mr Trump as a petulant child throwing his toys out of his pram. “He just wants to break stuff on the way out,” tweeted George Conway, a Republican lawyer and persistent critic of the president whose wife, Kellyanne Conway, recently served as a White House aide to Mr Trump.
Trump’s making the congressional GOP look “mean” just days before an election that will determine control of the Senate. An election that is arguably as important as the presidential election.
And why do people say Trump has a big ego?
Merry Christmas!!
Tags:
24. December 2020 at 11:20
Probably not a bad strategy to let the dems win both seats and take control of congress then watch them destroy the economy and further alienate the Trump heartland with woke policies – all leading to an easy Trump victory in 2024.
24. December 2020 at 11:29
You nailed it.
“Some critics have accused Mr Trump of trying to spark turmoil to spite his opponents, while others have suggested that the president is throwing a long temper tantrum because of his failure to win re-election.”
Why not both?
Merry Christmas to you too Scott.
24. December 2020 at 12:00
Probably not a bad strategy to let the dems win both seats and take control of congress then watch them destroy the economy and further alienate the Trump heartland with woke policies – all leading to an easy Trump victory in 2024.
24. December 2020 at 12:29
Market, I wouldn’t put that past him. As Lenin said, “The worse, the better”
24. December 2020 at 13:23
Dime store philosopher musings by Sumner. Clinton pardoned Marc Rich, a Democratic party supporter, after he was convicted of tax evasion. Does that make Clinton a bad man?
24. December 2020 at 13:59
Ray, Did pardoning Rich keep Clinton out of jail?
24. December 2020 at 16:24
with sumner’s response to ray, one has to wonder what keeps sumner out of a reformatory for bloggers who leap across multiple assumptions and speculations to arrive at drivel and mediocrity.
24. December 2020 at 16:33
When did Democrats ever crash the economy?
24. December 2020 at 16:39
Trump has the worst personality of any modern President, even topping Nixon or LBJ.
In terms of human carnage, Trump is a piker, of course, compared to Nixon, LBJ or Bush jr.
Yet, it is always the marginalized, the gadflies, the eccentrics, the misfits who first challenge conventional wisdom on any particular topic—and conventional wisdom can be wrong, even stagnant or deluded.
Michael Pettis has a new book out, “Trade Wars are Class Wars.”
To put it mildly, Trump is no scholar. Yet Trump’s take on international trade is probably more accurate than conventional scholars, if Pettis is right.
Few can regret Trump’s departure; his temperament is just not a fit.
But often, Trump’s challenges to establishment conventional wisdom (in instituionally corrupt Washington) had a great deal of merit.
24. December 2020 at 17:11
https://besacenter.org/perspectives-papers/covid-pandemic-roots/
Interesting take on origins of C19.
24. December 2020 at 19:42
@SSumner- “Ray, Did pardoning Rich keep Clinton out of jail?” – what? Mystery writing noted. You are claiming Trump’s pardon’s are somehow shielding Trump from prosecution when he leaves office? Remember, I have an IQ of 120 but even I sometimes can’t figure you out. What about lesser men?
@B. Cole – thanks on Covid-19’s possible man-made origin, the Israelis are #1 at getting to the core of an issue; they even believe in possible aliens, imagine that view taken seriously in the USA?!
Merry Christmas to all!
24. December 2020 at 20:08
Ray, You asked:
“You are claiming Trump’s pardon’s are somehow shielding Trump from prosecution when he leaves office?”
Naw, how could pardoning co-conspirators who might testify against you to save their own skin be viewed as corrupt? You’ve convinced me!
24. December 2020 at 21:35
Benjamin Cole,
The take in Trade Wars are Class Wars is interesting, but I take issue with the claim that the overseas influx of savings into the US must lower the household savings rate, if it doesn’t increase investment. For one thing, this seems specious empirically, if you look at this, for example:
https://fred.stlouisfed.org/graph/?g=z8v0
And, my hypothesis, with which very few seem to find plausible, is that tight monetary policy is the reason for imbalances in the US economy. I’ve been very slowly warming up to the idea that the rate of return on capital should equal the economic growth rate, and that, perhaps, should also equal the the risk-free interest rate, in monetary equilibrium.
Some general equilibrium modelers, like von Neuman, set interest rates equal to the economic growth rate in their models, but I wonder if that was more about simplifying assumptions rather than statements of reality.
The exciting thing about this perspective is, if true, macroeconomics is much more of an exact science, with hypothetical variables like r*, NAIRU, and output gaps measurable, even in the absence of econometrics.
24. December 2020 at 21:46
If I can find more evidence to support my hypothesis, perhaps a book with a title like r = g: How Bad Monetary Policy Distorted Economies and Confused Economists for Centuries.
A point I find it hard to get passed though, is that my hypothesis is very simple, and I’m certainly not the first to suggest modeling economies this way, so one would think economists would have a very good reason for rejecting such a perspective. However, none of those I’ve communicated with about it have presented any good reasons to reject the model.
I did have one famous economist tell me that it’s hard to model such an economy from a representative agent perspective. He could only think of a special case of the New Keynesian model, in which there’s no time preference, so discounting is entirely the result of marginal utility. There were also other special conditions, which he found implausible, so he rejected the idea for that reason.
However, I suspect economies can’t be usefully modeled through single representative agents, for the most part. I’m extremely skeptical of the idea, for example, that agent risk aversion or time preferences translate at the macro level. Just as risk averse investors open arbitrage opportunities that other investors exploit in highly liquid asset markets, like the stock market, I think the same is likely true for the economies overall. Otherwise, I don’t see how economies wouldn’t be naturally very inefficient.
24. December 2020 at 21:57
Good readers of this blog should believe that NGDP level targeting, for example, which could keep the US close to monetary equilibrium, would vastly decrease risk in the capital markets versus bonds, for example, while obviously keeping aggregate demand on a steady growth path. If true, then there’s good reason to believe that the rates of return on capital and the risk free interest rate should equal economic growth, if the frequency times the average magnitude of positive and negative real shocks are equal.
25. December 2020 at 02:10
Ray:
I still do not “believe in UFOs” as I believe nothing can travel faster than the speed of light. That makes interstellar space travel a bit of a chore.
But, on the other hand, the evidence for very odd aerial phenomena seems to be growing.
Two, it turns out that exoplanets are commonplace.
Three, life has evolved in hydrovents at the bottom of the ocean, in what we previously thought was inhospitable conditions—lots of poisons, high heat, and tremendous pressure.
So the odds are tilting in favor of aliens!
If aliens evolved on a world of very high water (or liquid) pressures, that might explain how they withstand very high g-forces.
….
I would say aliens are right up there with the idea that an ideal monetary policy is best implemented through a fractional-reserve banking system.
25. December 2020 at 02:21
Michel Sandifer–
Let me think for a while about what you are proposing.
My initial take is the real world is very granular, usually defined by institutional and structural imperfections (from the viewpoint of theoretical macroeconomics).
There is no such thing as “free,” “fair” or “foul” international trade—saying so is like bringing an umpire to an NFL game.
Or, “fair” is in the eyes of the World Wrestling Entertainment referee. Except there is no rule book, and no one listens to the referee anyway.
The theory of comparative advantage means nothing when real-world advantage is the province of government subsidies, tax codes, regulations, tariffs, VATs on imports, and so on.
How about government-sponsored training programs, or free rent (in Singapore, for example). Free build-outs of infrastructure and industrial parks.
Parting food for thought: David Ricardo eschewed his own theory of comparative trade, if capital was mobile between nations.
Oh, that.
“Free trade” is baloney, but convenient for multinationals and their lapdogs.
Add on: Who would design a system in which monetary policy is implemented through a profit-seeking, fractional-reserve banking archipelago?
25. December 2020 at 02:48
“An election that is arguably as important as the presidential election.”
Only ‘people’ who have not seen this would be so naive?
“Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens
Martin Gilens and Benjamin I. Page
Each of four theoretical traditions in the study of American politics—which can be characterized as theories of Majoritarian Electoral Democracy, Economic-Elite Domination, and two types of interest-group pluralism, Majoritarian Pluralism and Biased Pluralism—offers different predictions about which sets of actors have how much influence over public policy: average citizens; economic elites; and organized interest groups, mass-based or business-oriented. A great deal of empirical research speaks to the policy influence of one or another set of actors, but until recently it has not been possible to test these contrasting theoretical predictions against each other within a single statistical model. We report on an effort to do so, using a unique data set that includes measures of the key variables for 1,779 policy issues. Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism. “
https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf
25. December 2020 at 03:22
Come on Scott, I doubt that Hitler spent as much time playing golf as Trump. We should be grateful that he is too lazy to be an effective authoritarian, even if he is spending these last few weeks smashing and screaming. Let’s hope he doesn’t reach for the nuclear football.
I hope that 2021 is less exciting than 2020. I look forward to more posts from you on how to implement NGDP targeting, criticism of Biden and McConnell, and level headed commentary on China.
25. December 2020 at 06:51
The left are authoritarians.
Trump will save America.
Scott is being paid by the CCP.
Scott will be going to jail soon.
Patriots are coming.
Biden & Sumner in jail. So beautiful.
25. December 2020 at 06:56
Sumner refuses to condemn BLM marxists.
Sumner refuses to publicly support Jimmy Lai, Hong Kong and Taiwan. Sumner refuses to aknowedlge that the CCP is killing uiyghers. Sumner hates Freedom.
Sumner says Merry Christmas. Merry Christmas is an illegal word. The mere thought is now a crime.
Remember to obey your woke masters, that have enslaved you.
Biden is your master.
25. December 2020 at 07:07
@scott. Trump as Lenin and Hitler—-that’s a nice trick
@Ben Cole.. I enjoy alien stories a great deal. I do believe anything is possible—-but that is just a statement about the limits of what we can know. If one could bet, I would bet everything that—-at least as far as the last few thousand years is concerned, no aliens have made their way here. Of course, that assumes speed of light is a limit. But we know the universe expands——although it technically does not expand at a speed—-although they can measure the rate,of expansion which at enormous distances appears like its faster than speed of light——
Best I can do. However, earth is 4.5 billion years old. And intelligent man showed up about 10000 years ago—-and manlike beginnings showed up 5million years ago. How long will humans exist? Let’s pretend for fun, another 2 billion years as a civilized being.
So, for,example, maybe a billion years ago, on some exoplanet, sentient intelligent beings —relative to our time—-were 2 billion years ahead of where we are today.
Is it possible that General Relativity is the equivalent of Cave Drawings? Then there is Quantum Mechanics——particles infinitely apart entangled—-whatever that implies. So speed of light is merely a theory which makes great predictions—-it may not be literally true—-if such a thing as literally true even has meaning.
The universe is ridiculously huge. We see further out in light years by double (like the radius off a circle with us at center) than the age of universe——and there is no end in sight (ha). We keep seeing more.
Still, while UFOs (at least the “U” part) clearly exist, when you add “F” and “O”, I think it is safe to say they are man made, or random space junk showing up.
25. December 2020 at 07:09
UFO’s?
Disclosure project
“Secret Knowledge: Probably one of the most important videos of our time; On Wednesday, May 9th, 2001, over twenty military, intelligence, government, corporate and scientific witnesses came forward at the National Press Club in Washington, DC to establish the reality of UFOs or extraterrestrial vehicles, extraterrestrial life forms, and resulting advanced energy and propulsion technologies. The weight of this first-hand testimony, along with supporting government documentation and other evidence, will establish without any doubt the reality of these phenomena.”
https://www.youtube.com/watch?v=Gb8-FGdPQzc
Some ‘believe’ the ‘hogwash’?
Disclosure project
“Secret Knowledge: Probably one of the most important videos of our time; On Wednesday, May 9th, 2001, over twenty military, intelligence, government, corporate and scientific witnesses came forward at the National Press Club in Washington, DC to establish the reality of UFOs or extraterrestrial vehicles, extraterrestrial life forms, and resulting advanced energy and propulsion technologies. The weight of this first-hand testimony, along with supporting government documentation and other evidence, will establish without any doubt the reality of these phenomena.”
https://www.unexplained-mysteries.com/forum/topic/78477-debunking-the-disclosure-project/
25. December 2020 at 07:10
Benjamin: David Ricardo was a Classical economist who believed that under this system, with its operation of the unseen hand, every country had full employment. Classical economists were also still influenced by the Mercantilist’s fixation on preserving a country’s gold. So, if a country was already at full employment what did it benefit them from trading? Ricardo, referencing back to the operation of the unseen hand, showed that even countries at full employment would still benefit from trade by making their economy even more efficient. He did not envision a country the size of China with its under employment and poverty that would consider comparative advantage a joke.
25. December 2020 at 07:16
300b ($2,000) vs. 90b $600) stimulus
The COVID recession is worse than reported.
25. December 2020 at 07:17
And to @ Scott—-Merry Christmas! and to all his “fans” the same as well! My favorite blog. What does that say about me? Yikes.
25. December 2020 at 07:25
“Come on Scott, I doubt that Hitler spent as much time playing golf as Trump.”
—Obviously, you failed to read any history. Hitler was consistently at his country-side home, where he had orgies with his hot Jewish maids.
“We should be grateful that he is too lazy to be an effective authoritarian, even if he is spending these last few weeks smashing and screaming. Let’s hope he doesn’t reach for the nuclear football.”
— Yes, I’m sure that is what a billionaire is thinking. My life is so horrible inside my skyscraper that I’m just going to blow up the entire world. What an idiotic thing to say. Do you have an IQ of 50? You are the same type of loser that thinks NK and Iran are going to blow up the world. As if Kim Jong un and the Ayatollah want to give up their nightly orgies with teen virgins to be destroyed by American bombs. Retards!
“I hope that 2021 is less exciting than 2020. I look forward to more posts from you on how to implement NGDP targeting, criticism of Biden and McConnell, and level headed commentary on China.”
— You mean without BLM Marxists burning down cities? Level headed commentary? Do you mean to say we should water down the extermination of Uighyers, stealing of our intellectual property, sleeping with politicians, bribing academics to hand over research data, destroying HK, threatening India, Australia, Canada, Philippines, UK, Taiwan, and infiltrating our media. Is that “level headed”?
It is clear that the entry barrier to becoming an academic is now an IQ of 50. Our entire system is inundated with commies and idiots.
The only totalitarian party we’ve seen thus far, is the left. The radical wokeness is much more akin to 1933 Nazi Germany. In fact, the CCP is Nazi Germany 2.0, and the radical wokeness is their spawn.
25. December 2020 at 07:30
“The only totalitarian party we’ve seen thus far, is the left. The radical wokeness is much more akin to 1933 Nazi Germany. In fact, the CCP is Nazi Germany 2.0, and the radical wokeness is their spawn.”
Exactly!
Yet, when conservatives point to forensic audits and other irregularities they are compared to 1933 Nazi Germany. Apparently wanting elections to be “fair” is now a Nazi trait.
The idiocy abounds
25. December 2020 at 07:51
To see the difference between the two parties, one must only look at how they protest.
The republican party is mostly filled with love. Love for freedom, love for country, and love for history. While they recognize that the United States is imperfect, they also recognize how improbable the American story is. To this day, very few countries have the freedoms that the United States enjoy. As they watch those freedoms being eroded, they seek to hang onto the coattails of those that fight for them – DJT represents the rugged individualist. He represents freedom and liberty against the PC, radical CCP agenda.
The democratic party is filled with hatred. Hatred for history, for the words people use, for the freedoms people enjoy, for the rich, for the white-skinned, for whatever they deem the new imaginary oppressor. These people protest — not by singing songs — but by burning down properties. They believe in the communist narrative. They believe in the communist ideology. And their fake leaders (democratic party) only USE THEM as their foot soldiers to gain total power. If they can sow enough discord, they can tear down the precepts of a nation.
It would be more apt to say that Nancy Pelosi and Chuck Schumer represent 1933 Nazi Germany.
But at any rate, a house divided cannot stand. There are only two parties: Traitors and Patriots. And war is imminent.
Don’t fool yourself folks. Start moving your money. And start preparing. Because that war is coming. And it’s going to be ugly.
The CCP, Iran, and much of Europe will be funding the Democrats, or democratic states. The free world will be led by India, Australia, Japan, Brazil, Thailand, Saudi, Poland, Spain, and Mexico, who will be helping to fund the conservatives. Russia will be the wild card.
25. December 2020 at 08:16
http://www.centerforfinancialstability.org/amfm/Divisia_Nov20.pdf
“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Thus, wrote Milton Friedman in 1970 (The Counter-Revolution in Monetary Theory)”
“We are, of course, currently in a context where the velocity of broad money is dropping just about as fast as its overall supply is being expanded.”
25. December 2020 at 08:55
Sarah, You said:
“The republican party is mostly filled with love.”
Yes, that really shines through in Trump’s many tweets.
25. December 2020 at 09:19
Sarah,
Are you a born again Christian?
25. December 2020 at 11:04
Whose going to hold 2% inflation?
Inflation is about to spike in JAN (reported in FEB).
Look out below beginning on about the 4th.
25. December 2020 at 11:05
Whose going to hold 1% 10yr bonds when there’s 2% inflation?
25. December 2020 at 11:57
Spencer B. Hall,
That 1% 10 year yield is only nominal. The expected value of the dollar increased versus expected output as money tightened, so the real yield is higher.
25. December 2020 at 12:18
I’m probably the best bond timer in history.
Real yields would fall – as they always do with new money products.
The only way to get higher real yields is to drive the banks out of the savings business (which doesn’t reduce the size of the payment’s system). It just makes the banks more profitable, the exchange of buy8ing their liquidity for core deposits.
This is the forward look. And it is understated.
02/1/2020 ,,,,, 0.04
03/1/2020 ,,,,, 0.19
04/1/2020 ,,,,, 0.47
05/1/2020 ,,,,, 0.54
06/1/2020 ,,,,, 0.61
07/1/2020 ,,,,, 0.65
08/1/2020 ,,,,, 0.68
09/1/2020 ,,,,, 0.68
10/1/2020 ,,,,, 0.76
11/1/2020 ,,,,, 0.87 Nov. release 2%
12/1/2020 ,,,,, 0.91
01/1/2021 ,,,,, 0.95 Plateau
02/1/2021 ,,,,, 0.92 +
03/1/2021 ,,,,, 0.87 +
04/1/2021 ,,,,, 0.90 +
05/1/2021 ,,,,, 0.87 +
The average rate of inflation will increase substantially next year.
The CRB Index leads the way:
https://tradingeconomics.com/commodity/crb
“CPI for all items rises 0.2% in November as broad set of indexes increase”
https://www.bls.gov/cpi/
25. December 2020 at 17:47
He vetoed because it’s a crappy bill filled with pork and other legislation, not because he’s “angry” at the “American people”.
The American tax payer isn’t interested in paying for the development of all girl schools in Afghanistan, providing millions to the Kennedy Center, a billion to the Smithsonian, and 1.3B across southeast Asia to help prop up corrupt politicians. That 1.3B is great for getting “deals” for Big Business. Not so great for the American tax payer.
The best stimulus is to remove apparatchiks and dictators from power, and allow businesses to reopen.
25. December 2020 at 17:54
We’re Human.
And we’re coming!
Sumner and his communists friends will be jailed!
It’s a shame we couldn’t jail him on Christmas.
Scott “Benedict Arnold” Sumner.
Arnold thought he could get a big, fat, beautiful check from the England after they won the war.
Unfortunately, for that loser, American Patriots emerged victorious.
Sumner is betting on the commies – hoping he’ll get a big position at the top of the new totalitarian harris govt.
But patriots have great news. We will gladly offer you solitary for the rest of your life, or daily gang rapes in the general prison population?
Which do you prefer?
26. December 2020 at 03:47
Wow, trumptards out in full force again. Maybe something to do with the moon phases?
26. December 2020 at 06:16
Spencer B. Hall,
Why not just look at forward inflation expectations?
https://fred.stlouisfed.org/graph/?g=zaS7
26. December 2020 at 06:18
Nick and Bob,
Do you consider yourselves born again Christians?
26. December 2020 at 09:22
Nick, You said:
“He vetoed because it’s a crappy bill filled with pork and other legislation”
Thanks for some comic relief. I can always count on Trumpistas to sat the darndest things!
26. December 2020 at 12:40
Hitler took away peoples guns. As did mao.
And stalin.
And every dictator ever
Which party wants to take your guns? Which party wants to take away your only defense from the abusive apparatchik?
Hint:starts with a D.
26. December 2020 at 13:55
Scott,
Howcome forward looking inflation expectations have been on a continuous upward trend since April. Has there been a lot of new information over the last 8 months? Seems like, if anything, the stimulus response has been less than expected. The pandemic has really wound down faster than expectations either. Why were expectations so much lower in April?
26. December 2020 at 21:42
Trying, I’m not sure, but I do think there is a growing belief that the Fed is serious about average inflation targeting.
26. December 2020 at 21:56
Let me feed the trolls. Just a little bit.
Sarah,
On Hitler disarming people… Well they were already disarmed as compared to the US, because Germany had fairly tight gun control already before the Nazis seized power. They then did further disarm… the Jews. For the rest, Hitler actually deregulated gun ownership in 1938. https://en.wikipedia.org/wiki/Nazi_gun_control_argument.
But forget Hitler or Stalin, such weak examples. The Australian government did much better in successfully disarming people in grand fashion in 1997 by forcible gun acquisition. That was done by the then-communist leadership – oh wait, no, it was a centre-right coalition with a party carrying “national” in its name. In what is now known as the Communist Commonwealth of Australia (CCA) … again, just kidding. Anyhow, the citizenry now being helpless against their democratically elected government, remote internment camps were built, where unarmed and non-violent masses of people are still to this day imprisoned without trial or access to due process, some indefinitely. Not kidding here, but since the interned are boat refugees, you probably don’t care.
One more thing. As far as the US is concerned, cite one successful example of a citizen fighting abusive apparatchiks with guns, and winning. One example.
Something like that was actually tried by some “well regulated militias”, that the constitution is talking about, state militias that is, a.k.a. the US Civil war. “Well-regulated militias” lost.